C-72/83

JUDGMENT OF 10. 7. 1984 — CASE 72/83

In Case 72/83

REFERENCE to the Court under Article 177 of the EEC Treaty by the High Court of Ireland for a preliminary ruling in the proceedings pending before that court between CAMPUS O I L LIMITED,

ESTUARY FUEL LIMITED,

MCMULLAN BROS LIMITED,

OLA TEORANTA,

on the interpretation of Articles 30 and 36 of the EEC Treaty in relation to national legislation on the supply of petroleum products,

THE COURT,

composed of: Lord Mackenzie Stuart, President, T. Koopmans, K. Bahlmann and Y.Galmot (Presidents of Chambers), P. Pescatore, A. O Keelte, G. Bosco, O. Due and U. Everling, Judges,

Advocate General: Sir Gordon Slynn Registrar: H. A. Rühi, Principal Administrator

gives the following

CAMPUS OIL LIMITED v MINISTER FOR INDUSTRY AND ENERGY

I — F a c t s and p r o c e d u r e 2. Ireland has no domestic supply of crude oil. Until 1979 the supply of the 1. Under Section 2 of the Irish Fuels major proportion of refined petroleum products to the Irish market was in the (Control of Supplies) Act. 1971 (herein- hands of a small number of international after referred to as "the 1971Act"), as oil companies which had no necessary or amended in 1982, the Irish Government permanent commitment to the Irish may by order declare that the exigencies market. of the common good necessitate the control by the appropriate Minister on behalf • of the State of the purchase, supply and distribution of fuels.. The In July 1979, in order to improve the order remains in force for a given period security of oil supplies within the State, which, under the Fuels (Control of the Irish Government set up a state- Supplies) Act 1982 (hereinafter referred owned oil company known as the Irish to as "the 1982 Act"), cannot exceed 12 National Petroleum Corporation Limited months from the date on which it was (hereinafter referred to as "the INPC") made, without prejudice to the Govern- whose objectives include providing for ment's power to make a further order the supply of a significant part of the oil extending the validity of the original requirements of the Irish market, order. On 11 April 1979 the Irish operating within the Irish oil industry Government made an order declaring and oil market with a view to promoting that the exigencies of the common good orderly development and developing and necessitated the control of the supply maintaining economic activity which and distribution of fuels; that order was contributes to the efficiency of the oil subsequently extended from time to time. industry in Ireland.

Ireland's only oil refinery at Whitegate would be sold, on 25 August 1982 the in County Cork or at refineries in the Minister, in the exercise of the powers United Kingdom. conferred upon him by Section 3 of the 1971 Act, as amended by the 1982 Act, made the Fuels (Control of Supplies) Order 1982 (SI, No 280 of 1982) (herein- The Whitegate refinery was owned by after referred to as "the 1982 Order") in the Irish Refining Company Limited, order to maintain the Whitegate refinery itself owned jointly by four major oil in operation. companies, namely Irish Shell Limited, Esso Petroleum Company Limited, Texaco International Trader Incorpor- ated and BP (Ireland) Limited. The 1982 Order applies to all persons who import into Ireland any of the wide range of petroleum oils to which it In August 1981 the four companies refers. It requires those importers to which owned the refinery informed the purchase from the INPC that proportion Ministry for Industry and Energy that it of their requirements of each type of was their intention that refining should petroleum product during certain cease permanently at the refinery. Fol- specified periods which the Whitegate lowing unsuccessful negotiations with refinery's output represents of the total those companies with a view to the requirements of that type of petroleum continuance by them of the operation of product of all importers for the same the refinery, the Irish Government was period. faced with the option of either acquiring the refinery on behalf of the State or allowing it to close. In the event of the refinery's closure, all suppliers of refined Importers are obliged to provide the petroleum products on the Irish market Minister with all the necessary infor- would have been obliged to obtain their mation. Their purchasing obligation is supplies from abroad, principally from limited to 3 5 % of their total petroleum the United Kingdom which accounts for oil requirements or to tax of 40% of approximately 80 % of supplies. their requirements of any particular type of petroleum oil.

4. Campus Oil Limited, Estuary Fuel In the proceedings before the High Limited, McMullan Bros Limited, Ola Court, the plaintiffs in the main action Teoranta, PMPA Oil Company Limited contend that the requirement in the 1982 and Tedcastle McCormick & Company Order that they should purchase up to Limited are traders in petroleum 3 5 % of their requirements of petroleum products established in Ireland. They are products from the INPC constitutes a all members of the Irish Independent measure having an effect equivalent to a Petroleum Association, a trade as- quantitative restriction on imports. The sociation formed to protect the interests defendants in the main action maintain of Irish-owned traders in petroleum that the purchasing requirement does not products who trade either exclusively or constitute such a restriction and that, if it predominantly on the Irish market. They does, the restriction is justified on are engaged in the importation and sale grounds of public policy and public of fuel oils, particularly gas oils, gasolene security and is accordingly covered by and other fuel oils of various grades. Anicie 36 of the EEC Treaty. They supply approximately 14% of the gasolene market in Ireland and a somewhat higher percentage of other petroleum products. The remainder of the market is supplied by multinational companies. The High Court of Ireland took the view that, before hearing the submissions and arguments of the parties relating to the precise effects of the contested system on The abovementioned companies have trade and to the reasons for the purchase objected to being obliged to purchase of the Whitegate refinery by the State supplies from the INPC and have and for the introduction of that system submitted a complaint to the Com- on grounds of public policy and public mission on the matter. security, it was necessary to refer to the Court of Justice certain questions on the interpretation of Community law. Ac- cordingly, by Order of 9 December By letter of 1 February 1983 the 1982, the High Court referred to the Commission initiated the procedure Court of Justice under Article 177 of the under Article 169 of the EEC Treaty EEC Treaty the following questions for against Ireland for the infringement of a preliminary ruling: Articles 30, 36, 85, 86 and 90 of the EEC Treaty. The Irish Government submitted its observations on the alleged infringement by letter of 26 April 1983.

6. The order making the reference was The plaintiffs in the main action observe lodged at the Court Registry on 28 April first, by way of introduction, that before 1983. the entry into force of the contested 1982 Order, approximately 7 5 % of the Pursuant to Article 20 of the Protocol on petroleum products sold by them were the Statute of the Court of Justice of the purchased from suppliers and refineries EEC, written observations were sub- established in other Member States. mitted by the following: Campus Oil Those -purchases were made at prices Limited, Estuary Fuel Limited, prevailing at the time of purchase and McMullan Bros Limited, Ola Teorahta, their customers obtained the benefit of PMPA Oil Company Limited and such competitive purchasing. The Tedcastle McCormick & Company plaintiffs are small independent oil Limited, plaintiffs in the main action, companies which depend on their represented by Eoghan P. Fitzsimons, individual capacities to operate on a Senior Counsel, Richard Nesbitt, totally flexible basis on the open market. Barrister-at-law, and Messrs A. & L. The contested 1982 Order completely Goodbody, Solicitors; Ireland, the cuts across that freedom of action and Minister for Industry and Energy and places them at a competitive disad- the Attorney General, defendants in the vantage in relation to the major multi- main action, represented by Louis J. national companies operating on the Dockery, Chief State Solicitor, acting as Irish market. Agent; the Irish National Petroleum Corporation Limited, defendant in the The plaintiffs in the main action do main action, represented by Arthur Cox not contest the INPC's purchase or & Co., Solicitors; and the Commission operation of the Whitegate refinery, nor of the European Communities, rep- would they have any objection to the resented by Richard Wainwright and Irish State operating the refinery in a Julian Curali, members of its Legal competitive manner without the support Department, acting as Agents. of the contested 1982 Order and the Upon hearing the report of the Judge- regulatory system. However, they do Rapporteur and the views of the contest the right of the Irish State to Advocate General, the Court decided to compel them to purchase from the open the oral procedure without any Whitegate refinery a substantial pro- preparatory inquiry. However, it asked portion of their petroleum oil supplies at the Commission to reply to a question prices in excess of those prevailing on the

open market and fixed pursuant to the cember 1961 in Case 7/61 Commissions contested 1982 Order. The mandatory Italy [1961] ECR 317; judgment of 9 purchasing system created by the 1982 June 1982 in Case 95/81 Commission v Order has as its purpose to ensure that Italy [1982] ECR 2187). In that regard, the Whitegate refinery does not operate it is important to see the question as at a loss, and obliges the customer to concerning the existence of a mandatory subsidize the operation of the refinery. requirement to purchase goods at a specified price and not as to whether Ireland should or should not have an oil refinery. As regards the first question the plaintiffs in the main action are of the opinion that the purchasing requirement constitutes a classic example of a measure having an effect equivalent to a quantitative re- The defendants in the main action were striction within the meaning of Articles not seriously relying upon the concept of 30 and 31 of the EEC Treaty. The 1982 "public policy". In any event, that Order expressly envisages a restriction concept presupposes the existence of a on trade in petroleum products and genuine and sufficiently serious threat prevents Irish oil importers from im- affecting one 'of the fundamental porting 3 5 % of their own oil require- interests of society and in the context of ments. Since the 1982 Order makes no the Community it must be interpreted provision for any derogation from that strictly (judgment of 4. 12. 1974 in Case requirement, there is an express 41/74 Van Duyn v Home Office [1974] restriction on the free movement of ECR 1337; judgment of 27. 10. 1977 in petroleum products-between Ireland and Case 30/77 Regina v Boucherau [1977] the other Member States. ECR 1999). The system established by the 1982 Order is, however, essentially economically based since its purpose is to enable the defendants to operate the Furthermore, in the light of the Whitegate refinery with guaranteed judgment of the Court of Justice of 20 customers for its products and without May 1976 in Case 104/75 (de Peuter financial loss. The system is a financial [1976] ECR 613) the effect of the instrument and thus economic in nature contested 1982 Order is to ensure that and it cannot therefore come within the imported petroleum products (albeit concept of "public policy" referred to in initially in crude oil form) are channelled Article 36. It may be possible to envisage through the INPC. A system restricting circumstances in which the operation by the importing capacity of certain traders a Member State of an oil refinery can be whilst granting a monopoly-type im- justified on the basis of that article. porting franchise to another trader must However, there is no basis whatever for of necessity affect the free movement of justifying the existence of a mandatory the goods in question. purchasing requirement and the allied pricing system.

As it has done in relation to the concept of "public policy", the Court can give The Irish Government was confronted guidance for interpreting the breadth and by the urgent necessity of taking a scope of the concept of "public security" decision regarding the purchase of the within the meaning of Article 36. "Public refinery in a very short period of time security" involves the maintenance of since, in the interests of security of oil law and order within the State. In certain supplies, Ireland must have an operating extreme circumstances, the assistance of oil refinery. Following the purchase of the national army may be necessary to the refinery, the Government made enforce security. Hence, there is no extensive efforts to establish, through connection whatsoever between that negotiations, a voluntary system for the concept and a system such as that operation of the refinery. However, it established by the contested 1982 Order. came to the conclusion that only a Only the ownership and operation of the mandatory system would provide for the Whitgate refinery by the State can be operation of the refinery with any justified on grounds of public security certainty of continuous offtake of its but not the mandatory purchasing products and equitable treatment of all requirement. the oil companies on a basis acceptable to them. Account must be taken of Ireland's exceptional dependence on a single source, namely the United Kingdom, for imports of refined petroleum products, particularly in view of the history and severity of disruptions 2. Observations submitted by Ireland, by in oil supply throughout- the 1970s. the Minister for Industry and Energy Ireland is dependent on oil as an energy and by the Attorney General source for the support of all aspects of national life, not merely economic aspects but also in the social, medical, military, police and other spheres. The Irish Government is, however, still willing to seek an alternative solution to the temporary measures in question. The Irish Government describes first the Moreover, other countries, including relevant Irish legislation and the course other Member States, pursue similar of the proceedings before the High national policies to secure oil supplies. Court. It emphasizes, in particular, that One example is the system of control of ru n the reference for a preliminary ļi S oil distribution which the French was made at a time when the facts had Government operates with the Com­ not yet been established in the main mission's approval. proceedings and the defendants had not

As regards the first question, the Irish after the refinery had been purchased, Government submits that Articles 30 and that objections were raised by the 31 of the EEC Treaty prohibit essentially Commission. any form of discrimination which seeks to give or actually gives some form of protection or preference to domestic products. It is not the intention or the object of the mandatory system to have The justification for the contested system any effect on intra-Community trade. is based not on economic grounds but on Since Ireland has no domestic source of the view that the maintenance of secure crude oil, the system has the effect only supplies of oil for all purposes is a matter of diverting a proportion of oil imports of public policy and public security. In from the refined to the crude product. A that regard, particular attention must be system of that kind does not therefore paid to Ireland's geographical position, come within the scope of Article 30 et the absence of any domestic source of oil seq. of the EEC Treaty. and the fact that in the operation of the international oil market and especially in view of the dominance of a few multi- national oil companies, Ireland would be dependent on the United Kingdom for As regards the second question, the Irish 80% to 90% of its supplies of refined Government submits that Article 36 of petroleum products. In those circum- the EEC Treaty leaves the Member stances, the Irish Government has taken States a primary competence in the areas the view that on grounds of public concerned. It is for the national authority security and public policy it must in the first instance to decide on the maintain a substantial degree of measures to be taken. The concept of independence with regard to the "public security" is of a special kind purchase of crude oil and refining inasmuch as the Community has no capacity. competence itself in that field and since the Member States have retained their own powers intact. The Court should therefore give more weight to the views of a Member State on the concept of its public security than it does in the case of Before the mandatory system was the other concepts referred to in Article introduced as a temporary measure, all 36, particularly where the measure in the other alternatives were explored. The question forms the subject-matter of a Minister concerned is still exploring all solemn declaration by the Government the possibilities with a view to of the country concerned. suspending that system. Until a suitable alternative is found, the mandatory system must be retained.

prices prevailing at the time of purchase observations in regard to the second and only on the basis that, even at those question referred to the Court. The prices, the Whitegate refinery would be a INPC points out first that when the marginal supplier of such products, with Court considers that question, it should the result that the offtake of its products have before it the fullest information would be a matter of extreme uncer- concerning Ireland's very special position tainty. Some companies even stated that in regard to petroleum products, in- they would not purchase such products cluding, in particular, the following from the refinery at any price. Others factors : expressed a preference for a mandatory system, which they felt would be more equitable. Since the resumption of refining at Whitegate in August 1982, the prices of petroleum products processed there have fallen to a level much closer to the average import prices of those products. The time at which it will be possible to dismantle the Ireland is more dependent on petroleum mandatory system depends, however, not products than most EEC Member States. only on closure of the gap in price levels It relies on oil for 66 % of its energy but also on the attitudes of the oil needs, as against the Community average companies to the purchase of petroleum of 5 1 % . The Whitegate refinery's products from the refinery even at capacity corresponds to only two-thirds competitive prices. Another important of Ireland's consumption. Other Member factor is the question whether, in States, on the other hand, have a refining contrast with their present attitude, the capacity which far exceeds their total oil companies would be prepared to demand and have several domestic maintain on Irish soil adequate reserve refineries. Ireland is dependent es- stocks of petroleum products. sentially on oil supplies from the United Kingdom which provides 8 3 % of its oil imports although Ireland accounts for only 5% of the United Kingdom's oil exports. Multinational oil companies are In conclusion, the Irish Government more dominant in Ireland than in any considers that public policy and public other Member State and Ireland has no security within the meaning of Article 36 effective control over the distribution of of the EEC Treaty include measures petroleum products. Ireland therefore taken by a Member State that are needs to have a refining capacity, parti- necessary in order to maintain security of cularly in times of crisis, in order to oil supplies for that State. Whether the protect essential supplies. In any crisis of measures at issue in this case are justified a military nature, Ireland, being a non- on those grounds is a matter for the aligned country and not a member of national court. N A T O , would have to fend for itself. For similar reasons, countries such as Austria, Barbados, Cyprus, Jamaica, New Zealand and Thailand, which are in 3. Observations of the INPC a geo-political and economic situation similar to that of Ireland, all consider a domestic refining capacity to be an essential element of national security. A domestic refinery provides security, By way of addition to the submissions of however, only if it is maintained in the Irish Government, the INPC submits

In any event, the INPC -takes the view that the concepts of public policy and 4. Observations of the Commission public security should be interpreted in such a way as to exempt the mandatory system from Articles 30 to 34 of the EEC The Commission observes first that in Treaty. A secure petroleum supply is as the early stages of discussion it expressed essential to the life of a country as a some sympathy with the Irish Govern­ proper water supply, a proper road ment's difficulties whilst voicing reser­ system and a proper sewerage system. vations about the compatibility with The provision of those services is the Articles 30 to 36 of the EEC Treaty of responsibility of the State. Thus, the purchasing requirement proposed by ensuring a secure supply of petroleum the Irish Government. The Commission products is not a commercial or an formed its opinion on the 1982 Order economic matter but a task for which the once it had received the complaint Government is directly responsible since submitted by the plaintiffs in the main it concerns the life of the people, public action. policy and public security. The contested mandatory system is within the area of discretion left to the State for those purposes. Finally, that system does not The answer to the first question should constitute a means of arbitrary discrimi­ be "yes" since by requiring purchasers of petroleum products to obtain 35 or 4 0 %

JUDGMENT OF 10. 7. 1984 — CASE 72/83

In any event, the 1982 Order is The purpose of safeguarding national ineffective and inappropriate for the fuel supplies in the event of an oil crisis purpose of securing supplies. The real is to ensure that economic activity may difficulty faced by Member States which continue as before. Even if certain are dependent upon imported oil is the economic measures may have effects possibility that crude oil may suddenly be outside the purely economic sphere, a in short supply. In those circumstances, a measure of a wholly or predominantly refining capacity would be irrelevant to economic nature does not change its the security of supplies. There is at nature merely because it may have some present, and there is likely/ to be for non-economic effects. The exception on some time, a considerable surplus of grounds of "public policy" under Article refining capacity in the Community. 36 concerns the protection of the Directives 68/414/EEC and 72/425/ fundamental interests of the State, and EEC allow the Member States to hold the exception on grounds of "public their fuel stocks in the form of either security" should be restricted to such crude oil or refined petroleum products. matters as national defence and the However, there is nothing in those maintenance of civil peace in so far as directives which justifies the suggestion those matters are not covered by the that a refining capacity is necessary.

CAMPUS OIL LIMITED v MINISTER FOR INDUSTRY AND ENERGY

JUDGMENT OF 10. 7. 1984 — CASE 72/83

enable the life of the State to function products to the domestic market. As safely and effectively. regards whether a purchasing obligation is essential for such an undertaking to A Member State cannot invoke the fulfil its purpose, it must be borne in grounds of public policy' or public mind that a State-owned establishment, security if the measures in question are like independent refineries, is unable to designed predominantly to attain compete on the same footing with economic objectives. vertically-integrated multinational under- takings and is at a disadvantage as The measures in question, in order to be regards the ability to make largescale justified, must not go beyond what is purchases. necessary to attain the legitimate objectives protected by Article 36, as In response to a request made by the well, of course, as complying with its Court at the sitting on 29 February 1984, second sentence. the Commission submitted a series of documents concerning the rules ap- The Greek Government observed that plicable within the framework of the Article 90 (2) of the EEC Treaty may be International Energy Agency set up by applicable. A petroleum refinery con- the Organization for Economic Co- stitutes an undertaking of general operation and Development. economic interest inasmuch as its existence makes it possible to guarantee The Advocate General delivered his security of supplies of refined petroleum opinion at the sitting on 10 April 1984.

Decision

1 By order of 9 D e c e m b e r 1982, which was received at the C o u r t on 28 April 1983, the H i g h C o u r t of Ireland referred to the C o u r t for a preliminary ruling u n d e r Article 177 of the E E C T r e a t y two questions on the inter- pretation of Articles 30, 31 and 36 of the T r e a t y in o r d e r to enable it to decide w h e t h e r Irish rules requiring importers of p e t r o l e u m products to purchase a certain p r o p o r t i o n of their requirements at prices fixed by the competent minister from a S t a t e - o w n e d c o m p a n y which operates a refinery in Ireland are compatible with the T r e a t y .

s The reason given by the Irish Government for acquiring the Irish Refining Company Limited was the need to guarantee, by keeping refining capacity in operation in Ireland, the provision of supplies of petroleum products in Ireland, in view of the fact that if the refinery had closed, all suppliers of refined petroleum products on the Irish market would have been obliged to obtain their supplies from abroad. Approximately 80% of those supplies come from a single source, namely the United Kingdom.

JUDGMENT OF 10. 7. 1984 — CASE 72/83

6 The obligation to purchase from the INPC, provided for by the 1982 Order, is intended to ensure that the "Whitegate Refinery can dispose of its products. For each person to whom the 1982 Order applies the proportion of requirements covered by the purchasing obligation is equal, for each type of petroleum product, to the proportion which the Whitegate Refinery's output for a certain period represents of the total requirements for that type of petroleum product during the same period of all the persons to whom the 1982 Order applies. However, each importer is only required to purchase up to a maximum of 3 5 % of its total requirements of petroleum products and 40% of its requirements of each type of petroleum product.

7 The plaintiff undertakings contend, in support of their application in the main action, that the 1982 Order is contrary to Community law and in particular to the prohibition, as between Member States, of quantitative restrictions on imports and all measures having equivalent effect, laid down in Article 30 of the Treaty. The Irish Government and the INPC dispute that the 1982 Order is a measure which comes within the scope of that prohibition and contend that in any event it is justified, under Article 36 of the EEC Treaty, on grounds of public policy and public security inasmuch as it is intended to guarantee the operation of Ireland's only refinery, which is necessary to maintain the country's supplies of petroleum products.

io As the Court has held in a number of cases (see in particular the judgment of 10. 3. 1981, Joined Cases 36 and 71/80 Irish Creamery Milk Suppliers Association [1981] ECR 735), it is for the national court, in the framework of close cooperation established by Article 177 of the Treaty between the national courts and the Court of Justice based on the assignment to each of different functions, to decide at what stage in the proceedings it is appro- priate to refer a question to the Court of Justice for a preliminary ruling. It is also for the national court to appraise the facts of the case and the arguments of the parties, of which it alone has a direct knowledge, with a view to defining the legal context in which the interpretation requested should be placed. The decision as to when to make a reference under Article 177 in this case was thus dictated by considerations of procedural organization and efficiency which are not to be weighed by the Court of Justice, but solely by the national court.

1 1 Since it is for the national court to give judgment in the main action on the basis of the interpretation of Community law provided by the Court of Justice,, the parties have the opportunity in the main proceedings to bring forward any evidence they wish, particularly with regard to the reasons for the 1982 Order.

JUDGMENT OF 10. 7. 1984 — CASE 72/83

T h e first q u e s t i o n o n t h e i n t e r p r e t a t i o n of A r t i c l e 30 of t h e Treaty

12 The High Court's first question is whether Article 30 of the Treaty is to be interpreted as meaning that rules of the type laid down by the 1982 Order constitute a measure equivalent to a quantitative restriction on imports.

i7 As regards the Irish Government's argument regarding the importance of oil for the life of the country, it is sufficient to note that the Treaty applies the principle of free movement to all goods, subject only to the exceptions expressly provided for in the Treaty itself. Goods cannot therefore be considered exempt from the application of that fundamental principle merely because they are of particular importance for the life or the economy of a Member State.

is The Greek Government refers in this context to Article 90 (2) of the Treaty, contending that a refinery is an undertaking of general economic interest and that a State refinery could not, without special measures in its favour, compete with the major oil companies.

i9 It should be noted in that regard that Article 90 (1) provides that in the case of public undertakings and undertakings to which Member States grant special or exclusive rights, Member States are neither to enact nor to maintain in force any measure contrary to the rules contained in the Treaty. Article 90 (2) is intended to define more precisely the limits within which, in particular, undertakings entrusted with the operation of services of general economic interest are to be subject to the rules contained in the Treaty. Article 90 (2) does not, however, exempt a Member State which has entrusted such an operation to an undertaking from the prohibition on adopting, in favour of that undertaking and with a view to protecting its activity, measures that restrict imports from other Member States contrary to Article 30 of the Treaty.

22 The Irish Government and the INPC point out that it is for the Member States to determine, for the purposes of Article 36, and in particular with regard to the concept of public security, their interests that are to be protected and the measures to be taken to that end. They contend that Ireland's heavy dependence for its oil supplies on imports from other countries and the importance of oil for the life of the country make it indispensable to maintain refining capacity on the national territory, thereby enabling the national authorities to enter into long-term delivery contracts with the countries producing crude oil. Since the system at issue is the only means of ensuring that the Whitegate Refinery's products can be marketed, they consider it to be justified by considerations of public security as a temporary measure until another solution can be found to safeguard the continued operation of the Whitegate Refinery.

23 In the United Kingdom's view, the term "public security" in Article 36 of the Treaty covers the fundamental interests of the State such as the maintenance of essential public services or the safe and effective functioning of the life of the State. The exceptions provided for in that article cannot be relied upon if the measures in question are designed predominantly to attain economic objectives. Those measures must not go beyond what is necessary to attain the objective protected by Article 36.

24 T h e plaintiffs in the main action point out that the problem is n o t w h e t h e r or not refining capacity needs to be maintained in Ireland, but rather w h e t h e r the system chosen to enable t h a t refinery to function can be justified on the basis of Article 36. T h e real purpose of the rules at issue is to ensure that the

Thirdly, whether the system at issue is such as to enable the objective of ensuring supplies of petroleum products to be attained and whether it complies with the principle of proportionality.

T h e j u s t i f i c a t i o n of t h e m e a s u r e s at issue in the light of C o m m u n i t y r u l e s on t h e m a t t e r

27 Recourse to Article 36 is no longer justified if Community rules provide for the necessary measures to ensure protection of the interests set out in that article. National measures such as those provided for in the 1982 Order cannot therefore be justified unless supplies of petroleum products to the Member State concerned are not sufficiently guaranteed by the measures taken for that purpose by the Community institutions.

JUDGMENT OF 10. 7. 1984 — CASE 72/83

30 Even though those precautions against a shortage of petroleum products reduce the risk of Member States being left without essential supplies, there would none the less still be real danger in the event of a crisis. According to Article 3 of Council Decision 77/186/EEC, the Commission may, as a precautionary measure, authorize a Member State, subject to certain conditions, to suspend the issue of export licences. That authorization is to be granted subject only to. the condition that traditional trade patterns are maintained "as far as possible". The Council, by a qualified majority, may revoke that authorization and that power is not subject to any express reference to traditional trade patterns. According to Article 4, in the event of a sudden crisis, a Member State may, subject to certain conditions, suspend the issue of export licences for a period of 10 days. In that case, the Council, by a qualified majority, may adopt the appropriate measures.

CAMPUS OIL LIMITED v MINISTER FOR INDUSTRY AND ENERGY

3i Consequently, the existing Community rules give a Member State whose supplies of petroleum products depend totally or almost totally on deliveries from other countries certain guarantees that deliveries from other Member States will be maintained in the event of a serious shortfall in proportions which match those of supplies to the market of the supplying State. However, this does not mean that the Member State concerned has an unconditional assurance that supplies will in any event be maintained at least at a level sufficient to meet its minimum needs. In those circumstances, the possibility for a Member State to rely on Article 36 to justify appropriate complementary measures at national level cannot be excluded, even where there exist Community rules on the matter.

35 It is true that, as the Court has held on a number of occasions, most recently in its judgment of 9 June 1982 (Case 95/81 Commission v Italy [1982] ECR 2187), Article 36 refers to matters of a non-economic nature. A Member State cannot be allowed to avoid the effects of measures provided for in the Treaty by pleading the economic difficulties caused by the elimination of barriers to intra-Community trade. However, in the light of the seriousness of the consequences that an interruption in supplies of petroleum products may have for a country's existence, the aim of ensuring a minimum supply of petroleum products at all times is to be regarded as transcending purely economic considerations and thus as capable of constituting an objective covered by the concept of public security.

36 It should be added that to come within the ambit of Article 36, the rules in question must be justified by objective circumstances-corresponding to the needs of public security. Once that justification has been established, the fact that the rules are of such a nature as to make it possible to achieve, in addition to the objectives covered by the concept of public security, other objectives of an economic nature which the Member State may also seek to achieve, does not exclude the application of Article 36.

T h e q u e s t i o n w h e t h e r the m e a s u r e s are c a p a b l e of ensuring s u p p l i e s a n d t h e p r i n c i p l e of p r o p o r t i o n a l i t y

37 As the Court has previously stated (see judgments of 12. 10. 1978, Case 12/78 Eggers [1978] ECR 1935, and of 22. 3. 1983, Case 42/82 Commission v France [1983] ECR 1013), Article 36, as an exception to a fundamental principle of the Treaty, must be interpreted in such a way that its scope is not extended any further than is necessary for the protection of the interests which it is intended to secure and the measures taken pursuant to that article must not create obstacles to imports which are disproportionate to those objectives. Measures adopted on the basis of Article 36 can therefore be justified only if they are such as to serve the interest which that article protects and if they do not restrict intra-Community trade more than is absolutely necessary.

42 The plaintiffs in the main action and the Commission consider, however, that even if the operation of a refinery is justified in the interest of public security, it is not necessary in order to achieve that objective, and, in any event, it is disproportionate in relation to that objective, to oblige importers to satisfy a certain proportion of their requirements by purchase from the national refinery at a price fixed by the competent minister.

JUDGMENT OF 10. 7. 1984 — CASE 72/83

43 The Irish Government contends, on the other hand, that the purchasing obligation is the only possible way of keeping the Whitegate Refinery in operation. That requires a certain degree of use of the plant's capacity since the major international oil companies, on which the Irish market depended for 8 0 % of its supplies in 1981, have clearly stated that they are not prepared to buy any petroleum products at all from the Whitegate Refinery, because they prefer to market the products from their own refineries in the United Kingdom. The fixing of the selling price by the minister on the basis of the refinery's costs is necessary in order to avoid financial losses.

44 It must be pointed out in this connection that a Member State may have recourse to Article 36 to justify a measure having equivalent effect to a quantitative restriction on imports only if no other measure, less restrictive from the point of view of the free movement of goods, is capable of achieving the same objective.

45 In the present case, therefore, it is necessary to consider w h e t h e r the obligation placed on importers of p e t r o l e u m products to purchase at prices determined o n the basis of the costs incurred by the refinery in question is necessary, albeit only temporarily, for the purpose of ensuring that e n o u g h of the refinery's p r o d u c t i o n can be m a r k e t e d so as to g u a r a n t e e , in the interest of public security, a minimum supply of petroleum products t o the State concerned in the event of a supply crisis.

49 The proportion of the total needs of importers of petroleum products that may be made subject to a purchasing obligation must not, therefore, exceed the proportion which the quantities set out above represent of the current total consumption of petroleum products in the Member State concerned.

so It is for the national court to decide whether the system etablished by the 1982 Order complies with those limits.

si The answer to the second question should therefore be that a Member State which is totally or almost totally dependent on imports for its supplies of petroleum products may rely on grounds of public security within the meaning of Article 36 of the Treaty for the purpose of requiring importers to cover a certain proportion of their needs by purchases from a refinery situated in its territory at prices fixed by the competent minister on the basis of the costs incurred in the operation of that refinery, if the production of the refinery cannot be freely disposed of at competitive prices on the market concerned. The quantities of petroleum products covered by such a system

JUDGMENT OF 10. 7. 1984 — CASE 72/83

must not exceed the minimum supply requirement without which the public security of the State concerned would be affected or the level of production necessary to keep the refinery's production capacity available in the event of a crisis and to enable it to continue to refine at all times the crude oil for the supply of which the State concerned has entered into long-term contracts.

Costs

CAMPUS OIL LIMITED v MINISTER FOR INDUSTRY AND ENERGY

The quantities of petroleum products covered by such a system must not exceed the minimum supply requirements without which the public security of the State concerned would be affected or the level of production necessary to keep the refinery's production capacity available in the event of a crisis and to enable it to continue to refine at all times the crude oil for the supply of which the State has entered into long-term contracts.

M a c k e n z i e Stuart Koopmans Bahlmann Galmot

Pescatore O'Keeffe Bosco Due Everling

Delivered in open court in L u x e m b o u r g on 10 July 1984.

D . Louterman A. J. M a c k e n z i e Stuart Administrator President